Stocks edge higher after Fed trims bond purchases

ALEX VEIGAAP Business Writer Published: June 18, 2014 3:53 PM

1 of 4 Photos | View More Photos

Stocks edged higher in afternoon trading Wednesday following the Federal Reserve's latest policy announcement. The central bank said it would cut another $10 billion from its monthly bond purchases, citing an improving U.S. job market.

KEEPING SCORE: The Standard & Poor's 500 rose six points, or 0.3 percent, to 1,948 as of 2:42 p.m. Eastern Time. The Dow Jones industrial average added 25 points, or 0.2 percent, to 16,834. The Nasdaq composite gained five points, or 0.1 percent, to 4,343.

FED SPEAKS: Reaction to the Fed's latest policy statement and economic forecasts was muted on financial markets. Stocks edged slightly higher and bond yields remained about where they were before the Fed made its announcement. The Dow Jones industrial average had been down about 20 points just before the Fed news.

THE QUOTE: John Canally, investment strategist and economist for LPL Financial in Boston, said the Fed statement was pretty much in line with expectations.

"I don't think this is one of those (Fed) meetings that's a course-changer on markets," Canally said. "This is not something that's going to impact markets longer term. Not much here for markets to chew on."

[Article continues below]

SHIP SHAPE: FedEx gained $7.69, or 5.5 percent, to $148 after the company reported that its quarterly profit rose as growth in online shopping gave its ground-shipping business a lift. Earnings and revenue both topped Wall Street's expectations.

SECTOR VIEW: The 10 sectors in the S&P 500 notched gains, with utilities rising the most.

REST UNEASY: Shares in La-Z-Boy slumped in early trading, a day after the furniture seller posted weaker than expected fourth-quarter earnings and lower sales. The stock shed $2.23, or 8.9 percent, to $22.62.

BIDDING FOR BOTOX: Canada-based Valeant Pharmaceuticals has teamed up with Bill Ackman's Pershing Square Capital Management to mount a cash-and-stock bid for Allergan that values the Botox-maker at around $53 billion. Allergan says the latest takeover bid from the two companies is still too low. Allergan shares rose $1.98, or 1.2 percent, to $162.51. Valeant fell 59 cents to $128.55.

NEW BOSS: Air Products & Chemicals surged $8.20, or about 6.7 percent, to $129.80 after the specialty gas company announced it hired Rockwood's Seifi Ghasemi as its new chairman and CEO to replace its retiring chief executive.

BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.61 percent from 2.65 late Tuesday.